Assured Guaranty Guarantees Additional UK University Obligations
£87 million wrapped loan for University of London student halls
Public Company Information:
LONDON--(BUSINESS WIRE)--Assured Guaranty (Europe) Ltd. (AGE)* announces the successful close of a guaranteed £87 million, 46-year index-linked loan, provided by The Pension Insurance Corporation (PIC) to the University Partnerships Programme (UPP). The guaranteed loan will be used to finance the construction of new student halls of residence for the University of London. UPP is the main equity sponsor (alongside the University) and also is responsible for maintenance, with construction to be carried out by Watkin Jones, a UK developer.
The construction of Duncan House will be located in Stratford, East London, the site of the London 2012 Olympics, and will involve the demolition of existing academic facilities and the construction of a 32 storey tower to house 511 student beds. The University of London is a federation of 18 colleges with a total full-time student population of approximately 113,000 and includes prestigious institutions such as University College London, the London School of Economics, King’s College London and Queen Mary.
Dominic Nathan, Managing Director of AGE, commented:
“For the university sector, where the concessions have 40-year maturities or more, the use of our AA wrap adds value in two ways. Firstly, it provides very long term debt that is ideal to match the maturity of these types of projects – 46 years in this transaction – and secondly, 100% inflation-linked debt provides highly efficient financing that adds real value to the sponsors. This is Assured Guaranty’s second wrapped transaction for a UK university in recent years (following a wrapped bond for Edinburgh University in 2013), and we are pleased to have what looks to be a promising pipeline going into 2017.”
Nick Proud, Chief Executive Officer of AGE, commented:
"The infrastructure finance market is transforming as a result of the implementation of Solvency II in January 2016. Assured Guaranty is able to provide a highly competitive and cost-effective solution for infrastructure debt because its AA guarantee allows for substantial capital relief under the new Solvency II rules. This is proving very attractive for both institutional investors and sponsors and issuers. We are entering what appear to be the most favourable market conditions for financial guarantees in nearly a decade.”
* AGE (company number 2510099) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. AGE provides its financial guarantee together with a co-guarantee from its affiliate Assured Guaranty Municipal Corp. (AGM).
Through its subsidiaries, Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty) is the leading provider of financial guarantees for principal and interest payments due on municipal, public infrastructure and structured financings. Its subsidiary AGM guarantees international infrastructure and U.S. municipal bonds - and was previously named Financial Security Assurance Inc. (FSA) before becoming an Assured Guaranty company in July 2009. AGE, a subsidiary of AGM, is Assured Guaranty’s European operating platform. AGL is a publicly traded (NYSE: AGO) Bermuda-based holding company. More information on AGL and its subsidiaries can be found at AssuredGuaranty.com.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release reflect Assured Guaranty’s current views with respect to future events and are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include, but are not limited to, those resulting from Assured Guaranty’s inability to execute its strategies; the demand for Assured Guaranty’s financial guarantees; further actions that the rating agencies may take with respect to Assured Guaranty’s financial strength ratings; adverse developments in Assured Guaranty’s guaranteed portfolio; and other risks and uncertainties that have not been identified at this time, management’s response to these factors, and other risk factors identified in AGL’s filings with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of 4 January 2017. Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.